Ford reports record $1.7 billion profitTue, 26 Oct 2010 00:00:00 -0700
Ford Motor Co. reported record third-quarter profits on Tuesday, raised its production forecast and said it will speed up steps to cut its debt.
Ford's $1.7 billion in net income was up from $997 million a year earlier. The company said it will boost fourth-quarter vehicle output in North America by 20,000 units, an increase of 3.5 percent.
The results marked Ford's sixth straight quarterly profit, and CFO Lewis Booth said the automaker will be "solidly profitable" in the current quarter, too.
"This is a very solid year in total, and we're projecting continued improvement next year," Booth said at a media briefing. "You can see our plan is beginning to work. We're very encouraged by that."
Revenue fell $1.3 billion from a year earlier to $29 billion, reflecting the August sale of Volvo. Excluding Volvo, revenue rose $1.7 billion.
The automaker said it will reduce its debt by a total of $10.8 billion this year, resulting in a zero net debt position by year-end.
In the second quarter, Ford had said it would have zero net debt by the end of 2011. Zero net debt means Ford will have the same amount of cash as it does debt, and will help the automaker return to an investment-grade credit rating.
“It's important; it's another step (toward becoming investment grade) but we need to take steps to continue to improve the cash position of the business and continued improvement of the balance sheet,” said Neil Schloss, Ford's treasurer.
Ford ended the third quarter with $26.4 billion of automotive debt. After it pays off its VEBA obligation on Friday, it will have $22.8 billion in debt. Ford ended the quarter with $23.8 billion in automotive gross cash.
Excluding special items, Ford reported a pre-tax operating profit of $2.1 billion, an improvement of $1.1 billion from a year earlier.
Under the changed production forecast, Ford will build 590,000 vehicles this quarter in North America.
For the third quarter, Ford Credit reported net income of $497 million, up from $427 million a year earlier.
By Jamie LaReau- Automotive News